Accounting for state aid in the context of several exemptions

Administrative courts and tax authorities more and more often claim that enterprises which operate in Special Economic Zones in Poland (SEZ) are obliged to calculate the available state aid limit separately for each permit they have. Consequently, they cannot enjoy exemption up to the total sum of state aid limits available under individual permits.

One example could be the ruling of 26/06/2015 (file no. I SA/Po 1235/14) issued by the Provincial Administrative Court (PAC) in Poznan. The court confirmed the above-mentioned approach according to which a taxpayer who operated in several SEZs was obliged to calculate separate results on his operations in each zone.

The case considered by the PAC involved an incorporated company which applied for a permit to manufacture cars and car parts in one SEZ. At the same time, the company already had three permits for the same kind of business in another SEZ. After obtaining the new permit the company wanted to exempt the income from its business conducted in the first zone until it reached the limit resulting from the permits already held and then the company wanted to exempt the income it earned in both zones until it reached the aggregate state aid limit. Neither the tax office nor the PAC agreed with such an approach.

The above-mentioned situation involved a business conducted in more than one SEZ. Yet, the tax authorities have recently begun to deny taxpayers the right to combine the state aid limits even if they enjoy several exemptions in one and the same SEZ, e.g. advance tax ruling of 19/10/2015 (file no. IBPB-1-2/4510-471/15/AB) issued by the Director of Tax Chamber in Katowice or advance tax ruling of 07/07/2015 (file no. ILPB/4510-1-152/15-4/AO) issued by the Director of Tax Chamber in Poznan.

In other words, we are witnessing a turnaround in the tax authorities' approach to this issue. Not so long along the same authorities consistently held that one set of records was enough. Examples include the individual tax ruling of 16/06/2015 (file no. ILPB3/4510-1-123/15-2/AO) issued by the Director of Tax Chamber in Poznan or the individual tax ruling of 10/10/2013 (file no. IBPBI/2/423-829/13/JD) of the Director of Tax Chamber in Katowice.

We remain hopeful that administrative courts will revise this new approach soon. At this point, it seems safer to calculate the limit of the available state aid separately for each permit you have.

Our tax advisers in Rödl & Partner offices in Cracow, Gdansk, Gliwice, Poznan, Warsaw and Wroclaw will be glad to help you calculate your limit of the state aid you receive in the form of tax exemptions on your operations in Special Economic Zones. They will also answer your other questions about taxes, and will provide legal advice in Poland on conducting a business within a SEZ as well as any other aspects of your operations.

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